Govt approves sale of Telstra

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The Federal Government's joint party room has approved the full
sale of Telstra, Prime Minister John Howard said today.

The sale is expected to take place in 2006.

Howard said the partyroom, which met this afternoon, had
approved the plan to sell off the government's remaining majority
share in the telco.

"This is a very significant and very beneficial announcement for
the benefit of all Australians," he told reporters.

"It provides a very important addition to a process which the
government has undertaken since it was elected of improving
telecommunications all around Australia."

Howard said the timing and the nature of the sale would be
decided at a later date.

"The precise timing and the nature of the sale is something that
will be determined later," he said.

"The scoping study has already indicated that the most
propitious at this time for the sale will be in 2006. But the
ultimate nature of the sale will be determined at that time."

Howard said the sale legislation would be introduced when
parliament resumed in two weeks.

"That legislation will authorise the sale of the remaining 51
per cent - the precise timing and nature of the sale will be
something that will be determined later," Howard said.

"The decision that we've taken today will, I believe, reflect a
fundamental reality and that is, that it is quite
counter-productive and not in the national interest for the
Australian government to own more than half of the largest company
in Australia."

Howard said there would be a $A2 billion trust fund to address
telecommunications shortfalls.

"If the sale legislation is approved and after the government
has disposed of a significant part of its remaining interests,
there will be established a trust fund of some $A2 billion," he
said.

"And out of that trust fund, the revenue earned, the revenue
earned from the trust fund will be committed to addressing any
identified gaps or shortfalls in telecommunications."

Howard said recommendations in relation to the gaps and
shortfalls would be made by an independent review committee, with
the final decisions to be made by the government.

Howard said in addition to the trust fund there would be $A1.1
billion for the rollout of broadband.

He said it was counterproductive and not in the national
interest for the Australian government to own more than half of the
largest company in Australia.

"The conditions attracting to the sale contain very important
and valuable conditions to future of telecommunications around our
country," he said.

"They provide for what will be known as a connect Australia
commitment which will give Australians additional
telecommunications services with a $A1.1 billion rollout of
broadband, new regional clever networks, mobile services and also
valuable additional services for the indigenous community."

Nationals leader Mark Vaile said the legislation had the support
of all National and Liberal MPs and senators.

"Those representatives in my party and the Liberal Party that
have been representing the views and the concerns of regional
Australia will be wholeheartedly supporting this when the
legislation goes through," he said.

Howard said the sale was a recognition of market reality.

"It is absurd and counter-productive for a government to own
more than half of the largest company in Australia," he said.

"This is a good outcome for all telecommunications users around
Australia, particularly, but not only in rural and regional
Australia."

Howard said the package had received strong support from the
joint government parties and would be warmly welcomed by the
Australian community when its benefits were fully explained.

He said one federal MP had told the joint parties meeting he
reserved the right not to vote for the legislation.